What is NPO Sustainability Rating™?
NPO Sustainability Rating™ is not a new approach or concept. It is built on well-established evaluation approaches and international standards applied around the world to measure the mission impact and financial stability of Social Purpose Organisations (SPOs) / Non-Profit Organisations (NPOs) / Non-Profit Companies (NPCs).
There are hundreds of metrics your organisation can track, but to make things easier for NPOs and funders, we’ve narrowed down a long list to just eight (8) elements that we find are the most important, and relevant, in corporate social investment and the social development sector. The NPO Sustainability Rating™ Tool focus on answering five key questions:
- Is there evidence that the NPO’s programs are effective?
- Are the NPO’s programs cost-effective?
- Does the NPO have the skills and capacity to deliver its programs?
- Does the NPO spends funds honestly, prudently, and in accordance with statements made in fundraising appeals?
- Is the above information shared transparently with the board, funders and stakeholders?
The NPO Sustainability Rating™ Tool’s rigorous focus on evaluation certainly sets it apart from other methodologies as it focuses on accountability, performance, effectiveness, governance and oversight. The NPO Sustainability Rating™ Tool provides transparent information to balance social and financial consideration in decision-making.
Measurement Is No Longer Optional
Investors, donors, funders, government, NPO managers and practitioners are increasingly recognizing the need to measure NPO’s sustainability, in order to assess the achievement of the impact and value for money. Financial and operational information is necessary to make strategic decisions, however, it is not sufficient to answer important questions such as:
Is the NPO achieving high impact?
Are the results achieved sustainable?
A high value is now being placed on solving social problems and on outcomes (not just activities), funders and other stakeholders actually need to know whether NPOs are really producing change or just trying to.
“I don’t know” becomes a very expensive proposition when people are attaching economic value to actual results. NPOs can no longer be able to avoid the sustainability question by citing the complexity and lack of tools in measuring sustainability. Moreover, the capabilities for measuring the sustainability of NPOs have advanced significantly, with a wide range of affordable tools, software, and training now available within the sector.
Is This for You?
If you already know how sustainable you are – and you can prove it, this tool is not for you.
And if you do conduct comprehensive cost-benefit analysis every year, you will find this tool too basic.
But if you want to understand more about how effective your organisation makes an impact – and how much this matters – then this tool is for you.
You may need to prove your value to others (including funders). Or you may want to focus your efforts on where you make the most difference. You may be a board of the NPO, the funder/donor, a government institution or a charity.
If the question of how sustainable you’re as an NPO or the NPO receiving funding from you as a funder / donor keeps you awake at night, then this tool if for you.